Did you know that you can use your credit card as a way to build credit rather than as a way to spend? In other words, you can use your card to establish a personal credit score, which will give you access to more credit in the future. And that’s great because having access to credit means you have the opportunity to buy more things with it, like a new pair of shoes, an apartment, a car, or a house.
But before you can begin using your first Singapore credit card, you have to know the two major credit card comparison categories. Once you know these three categories, it will be easier for you to understand the pros and cons of a card and to make the best choice for you. Read on to learn more about each of these three credit card comparison categories and how they can help you make the best first impression with your first credit card.
The different types of credit cards in Singapore
There are two main types of credit cards in Singapore: unsecured and secured. Unsecured credit cards come with a high interest rate and are the most easily declined type of card. Unsecured credit cards are often referred to as “risky” among experts and may pose a significant risk to your credit score if you don’t pay off the balance on your card in full each month. In contrast, a secured card is typically a high-risk card because it needs a security deposit to open the account. If you don’t pay off your balance on time, the credit card company may take ownership of your security deposit to cover the balance.
What You Need to Know Before You Apply for Your First Singapore Credit Card
If you’re looking to get your first credit card in Singapore, you have to do your research beforehand to make sure you choose the right card. There are several things you should know first, so you can be sure you apply for a card that works best for you. Here are a few things to consider before you apply for your first Singapore credit card:
- Credit Card Type
Are you interested in an unsecured or secured card? Unsecured credit cards tend to carry a higher interest rate and are the most easily declined type of card. Secured cards also typically carry a higher annual fee than unsecured cards, but they usually come with a higher credit limit.
- Credit Card Amount
As a new user, you’re going to be looking at getting a fairly low limit on a card. The minimum amount your card can be is S$500, and it can only be increased if you have excellent credit. The decision is up to you to make, but we advise taking your financial statement and future into consideration before making any big decisions.
- Credit Card APR
You may have noticed that the credit card companies in Singapore all have different Annual Percentage Rates (APR). The APR is the percentage charged to you each month on all your purchases. The lower the number, the better, and some credit cards have even capped the lowest APR at 2%.
- Credit Card Rewards Programs
Credit card companies in Singapore offer a variety of different rewards programs. Some companies will give you points if you shop online, while others will give you cashback. It’s worth researching to find the program you like best.
Credit Card Issuers
Credit card issuers are the companies that issue the cards. There are several major credit card companies in Singapore, and they all offer a variety of different cards. One of the most important things you have to do before applying for a credit card is to compare the cards across different issuers to find the best card for you.
Credit Card Processing Companies
Credit card processing companies take your application, assess your eligibility, approve your application, and then process the transaction. Typically, you’ll have one option when it comes to credit card processing. However, you may be able to find a cheaper alternative by shopping around.
Now that you have an idea of the basic things you need to know about getting a credit card in Singapore, you probably already know what card you will be going for. Now, let us talk about applying for one.
The Proven Steps to Getting Approved for Your First Singapore Credit Card
Before you apply for your first credit card, it’s important to make sure you’re ready for the approval process. This means you need to do your research and make sure you have a solid credit score. Once you’re ready, you can move on to the following steps to get approved for your first credit card in Singapore.
- Search for Credit Cards
Your first step will be to go online and start searching for credit cards. The best place to start is by using your bank account search function. As long-time readers will know, opening a Singapore bank account is one of the best ways to build a credit score because it comes with a free Mailsend service.
- Compare Credit Card Offers
Once you have a few credit cards in mind, you can expand your search to include all the different card offers on credit card comparison websites.
- Apply for a Credit Card
Once you decide on a card that interests you, you can start the application process online. Keep in mind that you should always apply for a card with a credit card company that offers a low interest rate.
- Verify Your Identity
When you apply for a card, you’re asked to verify your identity by providing your CPF number, birth date, and address details. The more information you provide, the better your chances of getting approved.
What’s the Best Credit Card For New Users?
It’s important to note that not all credit cards are created equal. So, before you apply for your first credit card, it’s best to start with a low-limit card to help build your credit score. This way, you have more options when it’s time to apply for a more expensive card in the future. Here are the best cards for new users:
- Citibank credit card
The Citibank credit card is the best credit card for new users because it comes with a low S$15,000 credit limit. Not only that, but you’ll get a S$15 cash bonus when you make your first purchase with the card after making your first monthly payment.
- DBS credit card
The DBS credit card is another great option for new users because it comes with a low S$15,000 credit limit and comes with a S$50 cash reward when you spend your first S$1,000 on the card.
- HSBC credit card
The HSBC credit card is a good option for new users because it comes with a low S$15,000 credit limit and comes with a S$50 cash reward when you spend your first S$1,000 on the card.
Pros of Credit Cards
Credit cards come with several perks, such as frequent flyer miles, cash rewards, and insurance coverage. For example, you can use your credit card to buy travel insurance, which will cover you for medical expenses or lost baggage if you’re injured on a trip.
Cons of Credit Cards
Credit cards also come with several cons, such as high interest rates and the risk of being charged late fees and over-the-limit fees. For example, if you don’t pay off your credit card every month, the credit card company may charge you a late fee and charge you an over-the-limit fee for using too much money on your card.
Conclusion
If you’re looking to get a card, then a secured card is a great option for you. A secured card comes with a credit card in exchange for a security deposit, which maintains ownership of the money until the debt is paid off. If you don’t pay off your balance on schedule, the card company can take ownership of your deposit to cover the entire debt.
As a result, a secured card is a high-risk card that comes with a higher interest rate. This is beneficial, especially as a novice. That said, we hope this article helped in cleaning all of your doubts, and now pure ready to go get yourself a card.